TRADE, TECHNOLOGY AND LABOR-MARKETS IN THE WORLD-ECONOMY, 1970-90 - ACOMPUTABLE GENERAL EQUILIBRIUM-ANALYSIS

Whether the plight of OECD unskilled labour is due to trade or technol ogy is examined with a general equilibrium Heckscher-Ohlin calibrated model of North and South. Technology transfer from North to South via direct foreign investment in unskilled-labour-intensive manufacturing industries is identified as the trade shock. Simulations are carried o ut for this and other relevant shocks, and compared with the face of t he 1970-90 period. Weights on the shocks are selected by least squares . It is found that the roles of trade and technology in the plight of Northern unskilled labour are roughly equal.